As a CEO or small business owner, your time is precious and often limited. As the old adage goes, “time is money,” and that money is either lost or gained depending on how you spend your working hours.
A common headache and time drain among small business owners is how they manage their finance function. Trying to find and maintain a reliable, trusted employee to handle bookkeeping and someone local for accounting services is just the tip of the iceberg.
When optimizing systems and processes for efficiency in small businesses, the workload and responsibility often falls to one person, such as an admin or assistant, the business owner’s spouse, or another individual employee, and is likely not the best situation.
As a CEO in a small to mid sized business, there is a considerable amount of time that needs to be spent on managing the people, processes, and procedures of the business’s accounting function.
Luckily, another option to relieve the burden of your bookkeeping and accounting needs is to use a reputable outsourced accounting services company.
Small business accounting services can vary depending on your budget and other needs. Services can range from an individual bookkeeper to an accounting team at your disposal.
But how do you know when it is time to consider making an investment in accounting services?
Below are 5 indicators to consider when deciding whether to outsource the accounting services for your small business:
1) Spending Too Much Time on Accounting Processes
Did you know that multitasking may be costing your business productivity? According to a study cited by the American Psychological Association, the mental blocks that result from repeatedly shifting between tasks can cost upwards of 40% of a person’s productive time. If you spend as much—or more—time handling your financial records, payroll, and other related accounting services as you do working with clients, it may be time to look into outsourcing your accounting services.
Get it off of your plate and onto the plate of dedicated pros who can handle your daily, weekly, or monthly accounting problems quickly and efficiently.
Trained accounting service professionals are familiar with the most up-to-date accounting processes, regulations, and tax laws. They will ensure that your business is in compliance with generally accepted accounting principles (GAAP) and can save you a lot of time (and headaches) in the future.
2) Concerned About Employee Fraud
No one wants to think the worst of their employees. But sometimes there are employees who choose to show the worst of themselves to their employers. According to the 2016 Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners, CFE case study participants reported a median loss of $150,000, and more than 23% of participants reported losses of $1 million or more.
While small business owners suffered similar median losses, those losses often dealt more devastating blows due to the smaller size of the companies. That’s why it’s important to have accountability, structure, and internal controls.
By hiring outsourced accounting services, you will have a team of people who will cross the t’s and dot the i’s to ensure that your business’s finances are accurately reported—all without the expense of multiple employees, health benefits and other employment related costs. Having additional pairs of eyes checking for anomalies provides an extra layer of protection—not only in terms of trying to prevent fraudulent activity but to increase your business’s overall financial accuracy as well.
3) Delays in Accounting, Payroll
When your sole accountant, John Doe, goes on vacation with his family for a week, it may feel like the financial records side of your business screech to a halt. Or perhaps, for a variety of reasons, your accounting reports or payroll are often turned in late. This can create an accounting backlog and issues not only for you as an employer but also for your employees who are depending on those paychecks.
A benefit of outsourcing accounting services is the piece of mind in knowing that even in the absence of you or one of your employees, your books are still consistently maintained.
4) Records Are All Stored in a Filing Cabinet
If you want your business to keep up with or stay ahead of the competition, keeping outdated and time-consuming financial record processes is not the way to do it. Bringing your business out of the technological dark ages by adopting modern accounting technology software not only can help save time, it also can help you save more money and become more organized.
By outsourcing your accounting services, you won’t have to spend your time learning the ins and outs of using unfamiliar and complex software. And they can help you move towards a paperless accounting workflow.
5) Growing Too Fast to Keep Up With Finances
If your business is successful and growing at an accelerated rate, it may be time to consider outsourcing your accounting services. By trying to wear many hats and do too much yourself, you may inadvertently hinder the future growth of your business.
Outsourcing your accounting function provides even more value to rapidly growing businesses who need to focus their energy on scaling, not accounting. When you outsource accounting services, you can focus your time, energy and resources on increasing business revenue, enhancing your relationships with your customers, and achieving company goals or creating new ones.
Check out these helpful hints for a successful outsourced accounting relationship.